Correlation Between WisdomTree Silver and Xtrackers
Can any of the company-specific risk be diversified away by investing in both WisdomTree Silver and Xtrackers at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WisdomTree Silver and Xtrackers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Silver 3x and Xtrackers SP 500, you can compare the effects of market volatilities on WisdomTree Silver and Xtrackers and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WisdomTree Silver with a short position of Xtrackers. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Silver and Xtrackers.
Diversification Opportunities for WisdomTree Silver and Xtrackers
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and Xtrackers is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Silver 3x and Xtrackers SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers SP 500 and WisdomTree Silver is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WisdomTree Silver 3x are associated (or correlated) with Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers SP 500 has no effect on the direction of WisdomTree Silver i.e., WisdomTree Silver and Xtrackers go up and down completely randomly.
Pair Corralation between WisdomTree Silver and Xtrackers
Assuming the 90 days trading horizon WisdomTree Silver 3x is expected to under-perform the Xtrackers. In addition to that, WisdomTree Silver is 2.61 times more volatile than Xtrackers SP 500. It trades about -0.23 of its total potential returns per unit of risk. Xtrackers SP 500 is currently generating about 0.11 per unit of volatility. If you would invest 22,909 in Xtrackers SP 500 on August 24, 2024 and sell it today you would earn a total of 953.00 from holding Xtrackers SP 500 or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Silver 3x vs. Xtrackers SP 500
Performance |
| Timeline |
| WisdomTree Silver |
| Xtrackers SP 500 |
WisdomTree Silver and Xtrackers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Silver and Xtrackers
The main advantage of trading using opposite WisdomTree Silver and Xtrackers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Silver position performs unexpectedly, Xtrackers can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Xtrackers will offset losses from the drop in Xtrackers' long position.| WisdomTree Silver vs. Leverage Shares 3x | WisdomTree Silver vs. WisdomTree SP 500 | WisdomTree Silver vs. Leverage Shares 3x | WisdomTree Silver vs. GraniteShares FAANG ETC |
| Xtrackers vs. Leverage Shares 3x | Xtrackers vs. WisdomTree SP 500 | Xtrackers vs. WisdomTree Silver 3x | Xtrackers vs. Lyxor 10Y Inflation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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